Free online tool that helps you calculate the equivalent purchasing power of a certain amount of money in different time periods.
Inflation refers to the general increase in the price of goods and services in an economy over a period of time, usually measured by the Consumer Price Index (CPI) or other similar indices. In other words, it is the decrease in the purchasing power of a currency over time.
Inflation occurs when there is an excess of demand for goods and services relative to the supply of those goods and services, leading to an increase in their prices. This can be caused by a variety of factors, including an increase in the money supply, a decrease in the supply of goods and services, or an increase in demand due to factors such as economic growth or increased consumer spending.
Inflation can have both positive and negative effects on an economy. On the one hand, it can encourage spending and investment as people try to avoid the effects of inflation by buying goods and assets that will retain their value. On the other hand, high levels of inflation can make it difficult for businesses and consumers to plan for the future and can lead to economic instability.
Central banks and governments typically try to manage inflation by adjusting interest rates, controlling the money supply, and other monetary policy measures.